Businesses producing or selling recreational cannabis or cannabis products in Vermont may be subject to some, or all of the tax types listed below. Select a tax type to learn more about the tax and to find out which taxes apply to you:
- Cannabis Excise Tax
- Sales and Use Tax
- Property Taxes
- Vermont Income Tax
- Tobacco Products Tax
- Local Option Tax, where applicable
See the Vermont Cannabis Tax Guide for more in-depth information about the topics covered here:
Registering Your Cannabis Business
Be sure to acquire the proper license and certification authorizing you to collect taxes applicable to your business structure. Before you begin operations, a business will need to perform these tasks in this order:
Step 1. Request a Good Standing Certificate
Request good standing certification from the Department of Taxes by sending an email with the following information to firstname.lastname@example.org:
- Your business name
- ID (SSN or FEIN)
- include “Good standing request for Cannabis license” in the subject line.
Step 2. Obtain a License from the Cannabis Control Board
Submit your application and pay the application fee through the Cannabis Control Board’s (CCB) website.
(Cultivators Only): Obtain a Cultivator’s License from the Cannabis Control Board and any Applicable Permits
Any cannabis cultivation, drying, or processing must be done with a cultivator’s license issued by the Cannabis Control Board. Submit your application and pay your application fee through the Cannabis Control Board’s (CCB) website.
(Cannabis Retailers Selling Tobacco Products Only): Obtain a Tobacco Retailer License
A cannabis retailer who intends to buy and sell tobacco products, including those listed below, is required to obtain a tobacco retailer license from the Vermont Department of Liquor and Lottery before buying and selling tobacco products, which include:
- all vaping devices all vaping devices and vaporizers
- vape liquids and oil containing tobacco
- vape liquids and oil containing cannabis, which are also subject to tobacco products tax
Step 3. Register for a Business Tax Account
Register for your business tax account with the Department of Taxes to ensure the necessary tax accounts are set up. You will need a separate business tax account for each tax type. Registration is free.
A business can register for multiple tax accounts at the same time. Cannabis retailers and integrated licensees need to register for both cannabis excise tax and sales and use tax. If you already have a sales and use tax account, you do not need to register for a second account when registering for the cannabis excise tax.
Step 4: Post your License
The Department will provide licenses for cannabis excise tax and sales and use tax which must be prominently displayed at your place of business.
Once a business has obtained a retail license, retailers may sell cannabis and cannabis products to the public in Vermont to adults 21 years of age and older for off-site consumption.
Products Subject to Tax
The retail sales of the following cannabis and cannabis products are subject to cannabis excise tax, sales tax, and local option tax, where applicable. The retail business making the sale is responsible for collecting these taxes and remitting them to the Department of Taxes.
- concentrated cannabis
- edible products
- Please note food with cannabis is always subject to sales tax, but never subject to meals tax
- vape liquids and oil containing cannabis, which are subject to Tobacco Products Tax
- any product that is composed of cannabis and other ingredients and is intended for use or consumption
When filing a sales tax return, a business will need to report sales of cannabis and cannabis products separately from other taxable items, such as merchandise.
The following products are considered “tobacco products”:
- vaping devices
- vape liquids, and oils used in vaping.
This is true even when the products contain a substance other than tobacco or contain no substance. Tobacco products tax is imposed on the wholesale sale of tobacco products at a rate of 92 percent (92%) of the wholesale price. Tobacco wholesalers pay this tax. Learn more about Tobacco Products Tax.
Cannabis is not subject to sales tax when sold by a licensed medical cannabis dispensary to registered qualifying patients directly or through their registered caregivers.
Licensed cannabis cultivators may legally grow cannabis for use by licensed cannabis manufacturers and licensed cannabis retailers.
Sales Tax on Purchases
The following items are generally subject to tax when purchased by a cannabis cultivator:
- All parts of the plant Cannabis sativa L. which include:
- resin extracted from any part of the plant
- compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin
- machinery and equipment that will be used primarily for cannabis cultivation
Exception for Licensed Small Cultivators
There is one exception that allows licensed small cannabis cultivators to use certain sales tax exemptions for agricultural supplies, agricultural machinery and equipment, and compost when purchasing from a retailer.
The sales tax exemptions for agricultural supplies, agricultural machinery and equipment, and compost are available to a cannabis cultivator when: (1) the purchaser is a licensed cultivator (2) who cultivates an outdoor breeding stock space (3) that is not more than 1,000 square feet (4) on a parcel of land that is subject to applicable “required agricultural practices” prior to licensed cultivation.
To learn more about the special exception for licensed small cannabis cultivators, please refer to the Vermont Cannabis Tax Guide.
Land and buildings that qualify for the Current Use Program, also known as the Use Value Appraisal Program, are subject to property taxes at a reduced per acre “use value” rate.
See the Vermont Cannabis Tax Guide regarding special rules about using land and buildings enrolled in Current Use for cannabis cultivation.
- FS-1053, Agricultural Machinery, Equipment & Supplies: Taxable or Tax Exempt?
- FS-1072, Taxation of Sales of Medical Marijuana and Related Paraphernalia
- GB-1313, Vermont Cannabis Tax Guide
- 7 V.S.A. Chapter 31: Cannabis
- 7 V.S.A. Chapter 33: Cannabis Establishments
- 7 V.S.A. Chapter 35: Medical Cannabis Registry
- 7 V.S.A. Chapter 37: Medical Cannabis Dispensaries
- 18 V.S.A. § 4230a, Vermont Laws Related to Civil Penalties for Illegal Consumption
- 32 V.S.A. Chapter 207: Cannabis
Other Helpful Resources
- Current Use Program
- Vermont Cannabis Control Board
- Vermont Department of Liquor and Lottery
- Vermont Regulations Related to the Production and Sale of Cannabis
For additional information or assistance, please contact us at email@example.com or call (802) 828-2551.